Baking&Snack International - June 2012 - 1

June 2012

Vol. 1, No. 6

In this issue

2 4 6 8 11 12

Editorial United Biscuits Organics in Europe Mixers New Products News Roundup

A split on United Biscuits’ horizon
by Ildikó Szalai nited Biscuits, Hayes, Middlesex, UK, has been at the center of mergers and acquisitions (M&A) speculation in the snack food arena since 2010 when its private equity owners, Blackstone and PAI Partners, put it up for sale for an estimated £2 billion (€2.5 billion; US$3.2 billion). Although the line of suitors has included such global heavyweights as Kellogg, Campbell Soup and the Chinese conglomerate Bright Food, a sale has not been consummated. The latest twist in the story is a potential split of United Biscuits’ biscuits and snacks units in its domestic UK market, with the aim of helping each division operate more effectively on a separate basis. However, the two entities could also become more attractive acquisition targets. United Biscuits commanded a 2.6% retail value share of the global biscuits market in 2010, equating to sales of US$1.8 billion (€1.4 billion), and generated a further US$1 billion (€785 million) in retail value across the combined sweet and savory snacks, baked goods and confectionery categories. Despite its wide geographical presence — covering Asia Pacific, the Middle East and Africa and Eastern Europe — around 89% of the company’s sales are generated in Western Europe, a

The leading brand in the UK, McVitie’s Digestives, would be the flagship of the proposed biscuit division for United Biscuits, potentially increasing chances of a sale.
United Biscuits

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market expected to register a weak compound annual growth rate (CAGR) of less than 1% during 2011-16 in biscuits and a 2% CAGR in sweet and savory snacks.

An amicable separation
United Biscuits’ latest restructuring plan outlines its new business units within its UK operations, one for biscuits and the other for snacks. In the UK, the company generates some 40% of its sales in the sweet and savory snacks division, with a portfolio led by its McCoy’s, Hula Hoops and KP labels. Meanwhile, in the UK biscuit market, the leading brand, McVitie’s Digestive, belongs to United Biscuits, together with another four labels ranking in the Top 10. The company claims that splitting biscuits from its other snack food operations would offer a more focused approach to improve service to its customers and Continued on Page 4 www.bsimagazine.com

Hansaloy Corp. .................. 3
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Kwik Lok Corp. ................ 14
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ShickUSA Corp................ 13
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Baking&Snack International - June 2012

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